Analysis On Measurement And Causes Of Excess Production Capacity Of Jiangsu Manufacturing

Excess capacity refers to the actual production capacity on the market far exceeds the capacity of effective demand state in the process of economic fluctuation, or actual production output is lower than the optimal capacity, resources are not fully utilized and appear idle, and often is accompanied by the inventory backlog of goods, prices fell, the enterprise competition and the decline of industry profits and many other negative phenomena. This kind of economic phenomena has existed in the market economy and it is also an important problem which our country should be faced with in the process of economic development in recent years. Short-term supply and demand imbalance often appear in the market economy, it is a normal phenomenon; while the long-term excess capacity will damage the healthy development of industrial structure, lead to market disorder, aggravate the volatility of the economy, causing serious harm to the operation of the economy.In recent years, both social and government have paid great attention to the problem of excess capacity. The government economic work conference regards on resolving the excess capacity contradiction as an important task to promote the adjustment of industrial structure. The manufacturing industry of Jiangsu province in the country is in front. Therefore, it is particularly necessary to measure Jiangsu manufacturing factors of production capacity utilization rate and explore its overcapacity industries.In this paper, first of all defines the connotation of overcapacity from the industry level and combining graphics and expounds the criteria of overcapacity and then analysis overcapacity from micro manufacturer perspective by using the related theory of economics. Then theoretically expounds the causes of overcapacity under the background of economic transformation. Due to fiscal decentralization and political promotion system, makes the local governments have a strong motivation to go through low-cost land and bank soft budget constraints as well as financial subsidies and other means even at the expense of the environment to take care of enterprise investment behavior. At the same time also set up a simple game model to explain the formation mechanism of overcapacity.And then use the boundary production function to measure the 28 manufacturing industry of Jiangsu province from 2003 to 2012 capacity utilization rate. Accordingly, eight industries are overcapacity:Chemical Raw Materials and Chemical Products, Pharmaceutical manufacturing, Rubber Products, Plastic Products, Nonmetal Mineral Products, Black Metal Smelting and Processing industry which belongs to heavy industry field and Textile industry, Paper Products, Chemical Fiber which belongs to light industry field. Then according to the results of analysis of the characteristics and trend of excess capacity of manufacturing industry in Jiangsu province, results show that most of the industry capacity utilization rate is consistent with the change in the economic cycle fluctuation. Then using the constant coefficient model estimated that Jiangsu local government intervention has positive effects on the excess capacity of the panel data model, the over investment in local government intervention in the overcapacity is acted as the intermediary role. On this basis, put forward the corresponding policy recommendations, such as:reduce local government intervention, improve the factor market system and strengthen the environmental protection responsibility and so on which has a certain theoretical and practical significance.